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The Federal Reserve announced that it is hiking interest rates for the first time in three years to help bring the skyrocketing inflation under control.
"With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong," the Fed said in a statement.
The Federal Open Market Committee said it will raise rates by 25 basis points or a quarter percentage point, bringing them to a range of 0.25%-0.5%.
Officials said they are planning nine more hikes between now and 2023. They expect to raise the interest rates in each of their six remaining meetings in 2022, bringing interest rates to 1.9% by the end of the year. The Fed is then planning three more rate hikes in 2023 but is not planning to raise the rates in 2024.
The Federal Reserve also announced plans to reduce its massive $9 trillion balance sheet earlier than many analysts expected.
"In addition, the Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting," the Fed explained.
The Dow Jones Industrial Average saw a 500-point gain erased on the news. In afternoon trading, the Dow dipped into the red, while the S&P 500 and the NASDAQ were both trading ahead.